updated 05:00 pm EDT, Wed July 27, 2011

Blame bouncing between PayPal, Apple

Some people buying OS X Lion upgrades via PayPal are being overcharged, potentially in dramatic fashion, according to people responding to AppleInsider and Apple's support forums. In one case a person complains that they were charged about $3,878 on July 28th, the sum coming from 122 individual charges worth $31.79 each. "Apple blames PayPal, PayPal blames Apple," the person says. "They both are claiming to investigate, but I am stuck broke for three days now."

A poster on Apple's forums claims to have been hit in a similar manner, suddenly faced with a bill of $599.80 based on 20 individual charges for Lion. Only people who have a PayPal account linked to an iTunes Store account appear to be affected by the repeat billing so far; in any case, PayPal is in some instances blaming Apple for the situation, while Apple may insist it has only charged once. Accounts also suggest that the overcharging is a "known issue" at Apple though, possibly connected to automated payment systems overloading under the crush of Lion demand. Over a million downloads of the OS were made during the first day.

The financial consequences of the billing are proving serious in some cases. Beyond just the initial account drain, some people say they are encountering overdraft fees and other penalties. PayPal is allegedly refusing to refund money directly to bank accounts, preferring to withdraw the money from banks first and then credit refunds to PayPal balances.

Brick and Mortar

And if they had bought a copy of Lion at a brick and mortar store with cash none of this could have happened. Two problems:
1. Lion = currently download only. Sorry!!!!
2. Cash = cashiers looking at the green paper and thinking, "WTF?"

Haha

PayPal's only broken with Apple

I read about similar things having happened to people using the iTunes store a VERY, VERY long time ago by people using PayPal to make purchases and; 1. they don't know the cause and 2. I've heard of NO fixes and 3. it appears to be quite random.

My solution; NEVER use PayPal to pay for ANYTHING from the Mac App Store OR iTunes Store- especially if its linked to your bank account!!! PayPal is extremely secure and convenient- I'd also suggest investing in the extra protection of the PayPal Security Key (https://cms.paypal.com/us/cgi-bin/?cmd=_render-content&content_ID=security/security_key) for an extra layer of protection. This requires that you; 1. physically have this security key, which you link to your account as well as 2. requiring your password to login and/or make any purchases. This is entirely something related to Apple as there's no such track record when using PayPal for anything else...

Unfortunately any payment method, once approved, is susceptible to this happening... on the brighter side, thank God it's not someone stealing your identity!

paypalsucks.com

Paypal does an excellent job of selling you on why you need to be a "confirmed" user by linking your bank account to them. In reality, this just gives them one more source to go after funds in a dispute or a glitch.

Only a naive person would link their bank account to Paypal and expose their funds to being taken, even without considering computer glitches like this. A glitch like this is just one more reason. In this case, Paypal refuses to make it's customers whole after the mistake. They're going to make you wait until they're covered financially, then put the money into your paypal account. It's your responsibility to transfer it back into your bank account. This is all at THEIR convenience.

The LUCKY ones had thousands taken. The unlucky ones didn't have that much to take and racked up insufficient funds fees.

Solutions

I pay for my iTunes purchases using gift cards bought at a local store. Apple can only get as much as I've put in, not a dollar more. My PayPal account is linked to a bank account, but a spare one that I opened especially for PayPal. It never has more than $10 in it. When I sell something on eBay and get paid on PayPal, I transfer it out of that bank account to my regular account ASAP.